It is the day before the election which we have all been led to believe will be the most disruptive to markets in our generation, and what are markets doing?
Up strongly as we approach midday. The more economically sensitive small company and "value" stocks are doing especially well.
I am not one to normally pay much attention to daily market movements, but today's action is interesting because it is not at all what conventional wisdom would expect the day before an election. Particularly this election, with so much uncertainty regarding how long it will take to know the winners and losers. This of course doesn't mean "expect volatility" around the election was bad advice. After all, volatility can swing both ways - up and down. Today's gains may be rapidly reversed later this week (or later on today for that matter).
If polls are to be believed (and that is a big IF) the ultimate outcome is expected to be a Democratic win of the presidency, and perhaps both houses of Congress. Obviously that could usher in significant policy changes in the country. Morningstar published an interesting analysis of what changes may be forthcoming, and what that could mean for markets, in the event that Democrats take control. For you political junkies out there, it is an interesting read. Here is the link: